Compliance with HR regulations isn’t just about avoiding fines—it’s about creating a safe, ethical, and efficient workplace where both the company and its employees thrive. Yet, many small business owners and HR professionals find staying on top of compliance overwhelming, especially without prior HR experience.
Missed deadlines, misclassified employees, or outdated policies can result in costly penalties or even legal troubles.
In this post, we’ll review six essential HR compliance tips that will save your business time, money, and unnecessary stress.
HR Compliance Tips to Maintain Compliance
Staying compliant begins with identifying the common pitfalls businesses encounter.
Here are six actionable tips to help you maintain HR compliance with ease.
1. Properly Classify Employees and Contractors
Misclassifying workers is an expensive mistake. Employers need to determine whether their workers qualify as employees or independent contractors based on criteria set by the IRS and Department of Labor.
Misclassification can lead to hefty fines, back taxes, and other financial penalties. Make it a habit to review employee classifications regularly. This means conducting role audits to confirm that everyone’s responsibilities align with their legal categorization. Tools like IRS guidelines are helpful resources for ensuring your classifications meet legal definitions.
2. Accurately Track Hours and Wages
The Fair Labor Standards Act (FLSA) governs how businesses track hours worked and manage wages. With the rise of remote work, keeping track of hours—especially for non-exempt employees—is more critical than ever.
Don’t overlook “hidden work.” If an employee answers an email or takes a call outside of regular hours, that time must be compensated. Ensuring accurate tracking of overtime hours with tools like HRIS software helps you avoid wage violations.
3. Maintain Up-to-Date Employee Handbooks
An outdated handbook is a ticking compliance time bomb. Employment laws change frequently, making it essential to regularly review and update your employee handbook.
Your handbook should cover policies and procedures around harassment, leave entitlements, data privacy, and more. It’s also a chance to assess whether your policies align with your company culture and federal/state regulations. Aim for an annual review of your handbook to catch any necessary updates.
4. Track State and Local Regulations
Employment laws differ not only on the federal level but also across state and local jurisdictions. For businesses that operate in multiple regions, this adds complexity to staying compliant.
For example, minimum wage laws and paid leave policies vary significantly between states. A compliance software system can track these differences for you, or you might consider working with HR professionals who specialize in local regulations. Staying proactive will prevent compliance gaps and ensure your policies reflect jurisdiction-specific details.
5. Properly Handle Employee Data Privacy
With a rise in cybersecurity threats globally, safeguarding employee information is a critical endeavor. Many regions now require compliance with strict privacy laws, such as GDPR (General Data Protection Regulation) or CCPA (California Consumer Privacy Act).
Implement secure systems for storing and accessing sensitive data like social security numbers, medical information, or performance reviews. Make sure your employees understand how their data is handled and who has access to it, promoting transparency and trust.
6. Regularly Conduct Workplace Harassment Training
Workplace harassment training often happens only during onboarding, which results in outdated and ineffective practices. Regulations around harassment training, however, have evolved significantly in recent years.
To comply, make harassment training an ongoing effort for all employees—not just new hires. Interactive refreshers and scenario-based training sessions can help maintain a respectful workplace culture across teams while meeting compliance.
Creating a Proactive HR Compliance Framework
Your business needs to implement a proactive compliance framework to consistently follow these tips. Instead of rushing to react to breaches or updates in regulations, build a process that keeps you ahead of them.
Here’s how to get started:
- Appoint a Compliance Officer: Designate an individual or team tasked with monitoring regulatory changes, updating policies, and ensuring everyone remains informed.
- Leverage HR Technology: Use software that automates compliance-related documentation, tracks updates in labor laws, and flags potential risks.
- Continuous Staff Training: Prioritize ongoing training for HR personnel and managers. Educating your employees on compliance fosters a culture of accountability and reduces internal risks.
- Work with an HR Partner: An HR partner specializes in compliance and regulations, and they can pass on their expertise to ensure your business adjust with changing regulations.
Building a compliance framework protects your business and shows employees and external stakeholders that you’re committed to ethical and lawful practices.
Stay Ahead of HR Compliance with ABO
If all of this sounds overwhelming, don’t worry—there’s help. At ABO, compliance is built into the services we offer as an IRS-Certified PEO. Our experts stay on top of regulatory changes so you don’t have to.
With ABO by your side, you’ll get peace of mind knowing your compliance needs are handled.
Reach out to ABO today to learn more about how we can help your business stay protected.
